LOS ANGELES, April 18, 2008 (PRIME NEWSWIRE) -- Notice is hereby given that Glancy Binkow & Goldberg LLP has filed a Class Action lawsuit in the United States District Court for the Southern District of New York on behalf of a class (the "Class") consisting of all persons or entities who purchased and/or repurchased auction rate securities offered for sale by The Goldman Sachs Group, Inc. (NYSE:GS), and its principal U.S. broker-dealer, Goldman, Sachs & Co. (collectively, "Goldman Sachs") between March 25, 2003 and February 13, 2008, inclusive (the "Class Period").
A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at info@glancylaw.com, or visit our website at www.glancylaw.com.
On April 18, The New York Times reported that New York Attorney General Andrew M. Cuomo is investigating how auction rate securities were marketed to municipalities and public entities, and his office has subpoenaed 18 banks that underwrote and brokered auction rate securities, including Goldman Sachs Group, Inc. In addition, securities regulators from nine other states have formed a task force investigating how banks disclosed the risks of auction failures to investors, and the Financial Industry Regulatory Authority, working with the Securities and Exchange Commission, has initiated an inquiry into sales practices in the auction rate securities industry.
The Complaint charges Goldman Sachs with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning auction rate securities caused those securities to be overvalued and artificially inflated, inflicting damages on investors. Goldman Sachs provides investment banking, securities, and investment management services to corporations, financial institutions, governments and high-net-worth individuals worldwide. The Complaint alleges that defendants represented to investors that auction rate securities (also known as auction rate preferred stock, variable rate preferred securities, money market preferred securities, periodic auction rate securities and auction rate bonds) were equivalent to cash or money market funds, and highly liquid investments suitable for short-term investing. Defendants knew, but failed to disclose to investors, material facts about auction rate securities. Specifically, the Complaint alleges that defendants failed to disclose: (i) that auction rate securities were not cash alternatives, but actually were complex, long-term financial instruments with 30-year maturity dates or no maturity at all; (ii) that auction rate securities were only liquid at the time of sale because the auction market was artificially supported and manipulated by various broker-dealers to maintain the appearance of liquidity and stability; and (iii) that auction rate securities would become illiquid as soon as the broker-dealers stopped maintaining the auction market.
On February 13, 2008, approximately 87% of all auctions of auction rate securities failed when all major broker-dealers refused to continue to support the auctions. As a result of the withdrawal of support by all of the major broker-dealers, the market for auction rate securities collapsed, leaving the holders of these auction rate securities with no commercially reasonable means of liquidating the investments defendants offered and sold as a suitable alternative to money market funds and other short-term cash management vehicles.
On April 9, 2008, in a 10-Q filing with the SEC, Goldman Sachs acknowledged it has received requests for information from "various governmental agencies and self-regulatory organizations relating to certain auction products...and the related recent failure of such auctions." The New York Attorney General also is investigating how banks brokered auction rate securities and how they decided to allow some auctions to fail in February while supporting others.
Plaintiff seeks to recover damages on behalf of Class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the Court, not later than June 17, 2008, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Lionel Z. Glancy, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca/